Key Definitions
- "Act" refers to Republic Act No. 9136, Electric Power Industry Reform Act of 2001.
- "Captive Market" means end-users without supplier choice.
- "Contestable Market" means end-users with choice of supplier.
- "Certificate of Compliance" issued by ERC to Generation Companies.
- "Generation Rate Adjustment Mechanism (GRAM)" allows periodic adjustments reflecting fuel and purchased power cost changes.
- "Incremental Currency Exchange Rate Adjustment (ICERA)" adjusts for foreign exchange changes.
- Various entities defined: NPC, TRANSCO, PSALM, DOE, ERC, Distribution Utility.
- "Transition Supply Contract (TSC)" is electricity supply contract filed with ERC by NPC.
Filing and Approval of NPC Transition Supply Contracts
- NPC must file supplemental agreements for existing contracts within 30 days.
- ERC acts on supplemental agreements within 60 days.
- NPC must offer TSCs to Distribution Utilities within 60 days.
- Distribution Utilities submit letters of intent within 30 days of TSC offer.
- If capacity is insufficient, allocation is prorated.
- All executed TSCs must be filed with ERC for approval within 90 days.
Recovery of Generation Costs During TSC Term
- NPC and TRANSCO to jointly file Regional TSC Availability Records showing capacity, energy, transmission limits, contracts, and availability.
- Distribution Utilities recovery of generation costs limited to applicable Regional TSC Rate, provided equivalent electricity is available.
- Excess generation costs over TSC Rates disallowed except for eligible contracts under Section 33.
- Costs for electricity exceeding Regional TSC availability evaluated by ERC on technical, economic, environmental, financial criteria referencing DOE's Power Development Plan (PDP).
- Utilities to submit detailed supporting data for contract costs.
Recovery of Generation Costs After TSC Expiry
- Upon TSC expiration, ERC evaluates generation cost proposals for inclusion in Retail Rates based on comprehensive criteria.
- Utilities must submit technical, economic, financial data supporting costs.
- Cost recovery ensured through GRAM and ICERA mechanisms approved by ERC.
New Bilateral Power Supply Contracts
- Utilities may enter new or amend contracts with Generation Companies for their Captive Market, following limitations under Section 45.
- Prior ERC approval of rate applications needed before cost inclusion.
- Applications must include details on expected TSC availability, technical/economic characteristics, cost analyses, procurement process, transmission project details.
- For new capacity contracts, ERC approval must be within 6 months; Certificate of Compliance required.
- Applications must also cover alignment with PDP, load forecasts, and include alternative Demand Side Management (DSM) programs if filed after two years.
- Contracts to serve Contestable Market not subject to ERC approval but must be filed; associated costs are not recovered from Captive Market rates.
Authority and Final Provisions
- Separability clause affirms unaffected provisions remain valid if any part is invalidated.
- Guidelines take effect 15 days after publication in newspapers.
- Signed by ERC Commissioners and Chairman on March 25, 2004.